It might be tempting to tee off on the people who structured the Colorado Prepaid Tuition fund, which is closing because it's financially unsound, and criticize them for underestimating higher education inflation.The assumption that tuition would go up just 3 to 4...

How much has been cut from higher ed funding versus how much colleges have increased tuition/income/budgets? This would useful information to see in an editorial such as this. My guess is that higher funding cuts are dwarfed by the amount colleges such as CU have increased their budgets and income from tuition raises. Why does the Post keep repeating that it's higher ed funding cuts without producing the rest of the thesis statement--the proof. It's more about the costs, poor administration, and greed. More money going to higher ed I don't think would solve the problems--just as it hasn't solved the problem with K-12 schools either.

...The cost of getting a college education is out of control and has been for some time...

This may be the understatement of the year and the first government program I can ever remember actually sun setting. Its ironic it can't keep up with the escalating education costs its designed to help pay for.

I suspect Obamacare will suffer a similar fate with rate increases never covering the escalating costs of government mandated healthcare insurance.

mxer wrote:I for one am shocked that a government program was poorly managed and in the red.

I don't think that this article says it was poorly managed. In fact, it seems to say that the managers are taking the responsible step of shutting the fund down because it is unsustainable as designed, due to huge increases in tuition costs, over which it has no control.

No matter how much the Progressives try to brute force change it, the law of Supply and Demand still holds firm.

That is, when Colorado decided that more kids should go to college, demand went up. Supply has remained stable (no new universities are being built). Increased demand plus stagnant supply equals increased sell price.

Postgrad wrote:How much has been cut from higher ed funding versus how much colleges have increased tuition/income/budgets? This would useful information to see in an editorial such as this. My guess is that higher funding cuts are dwarfed by the amount colleges such as CU have increased their budgets and income from tuition raises. Why does the Post keep repeating that it's higher ed funding cuts without producing the rest of the thesis statement--the proof. It's more about the costs, poor administration, and greed. More money going to higher ed I don't think would solve the problems--just as it hasn't solved the problem with K-12 schools either.

Using the numbers from the story, the state is contributing about 27% less than they did 5 years ago. UC Boulder seems to be keeping costs in line (accounting for inflation) with a 36% tuition increase. The other schools mentioned seem to have some explaining to do. Of course, this is all dependent on what percentage of the schools budget comes from the state and what percentage comes from tuition.

None-the-less, I agree that it would be very interesting to see an in-depth investigation into the funding and expenditures of the schools. Given the burden that tuition now places on most families, that exposure could potentially help a lot of people.

It's a shame that we don't have abundant factory jobs for young people to get. It used to be that you could raise a family on a job that didn't require an outlay of several thousand dollars for higher education. Unfortunately, what the unions haven't made economically unfeasible our government has regulated them to the point that most of them have gone overseas. Personally, I came from a generation that didn't attend college if you didn't have the money to pay for it and found a way to success with hard work.

The reason that I would never trust my money to a quasi-public investment scheme such as this is that I can't help but envision it's investment decisions being directed in part by politically correct thinking. I don't know this, but I would not be surprised if this fund had and has a sizable renewable energy segment in it's investment portfolio, for instance. Of course, I have no actual knowledge of the fund's investment practices, but happily, I never needed to.

The sad part is that most of cost increase comes increases in adminstration. There are a good number of reports you can read about the increase in deans, provosts, and assistant provosts while the number of faculty have remained steady. These reports also show that these new administrative positions account for a large amount of the total increase in higher education costs.

ukdenverdan wrote:The sad part is that most of cost increase comes increases in adminstration. There are a good number of reports you can read about the increase in deans, provosts, and assistant provosts while the number of faculty have remained steady. These reports also show that these new administrative positions account for a large amount of the total increase in higher education costs.

The increases in government intervention and added compliance and reporting requirements can be tracked directly to the additional administrative positions! In order to let the faculty teach and do research to create new knowledge, you need additional people to do all the damned reports for the Department of Education!

ukdenverdan wrote:The sad part is that most of cost increase comes increases in adminstration. There are a good number of reports you can read about the increase in deans, provosts, and assistant provosts while the number of faculty have remained steady. These reports also show that these new administrative positions account for a large amount of the total increase in higher education costs.

*** While I agree with you, let's not forget the education being given away to the children of illegal aliens at many schools these days.

If the government will give a loan to an 18 year old for any amount to goto school there is no reason for schools to keep costs down.

If you don't understand that you have never sold houses or cars. The bank tells you how much the house or car can be sold for. In this case the "bank" is the government and there is no limit on the loans.

Glenn Reynolds, a professor of law at the University of Tennessee, has written a book arguing that "America is facing a higher education bubble. Like the housing bubble, it is the product of cheap credit coupled with popular expectations of ever-increasing returns on investment, and as with housing prices, the cheap credit has caused college tuitions to vastly outpace inflation and family incomes. Now this bubble is bursting."

The higher education bubble is also a common topic on his blog, where he provides a lot of commentary and links to studies that back up his assertion. One of my favorite passages there comes from one of his correspondents:

What I can’t understand about student loans is this: The government thinks it’s OK to loan tens of thousands of dollars to 18-22 year old kids with no jobs and only imagined prospects on no more than a handshake and a signature. And it guarantees those loans, too, even it if will pursue you to the grave to pay them back. Some kids end up with enough in student loans that they could have bought a house, instead.

And there’s the rub. No bank would give a mortgage loan to a 18-22 year old with no job and no prospects on no more than a handshake and a signature. Not only would it be a dangerous risk, but it would be bloody immoral on its face to do such a thing to a young person just starting out in life. Why then is it considered appropriate and moral to load up the same cohort of kids with mortgage-sized student loan debt?

What exactly is so valuable about a college education that warrants mortgage-sized costs to get one, when so many students fail to complete their courses of study (and probably shouldn’t have been in college anyway)? I worked for the university when I was in grad school, and let me tell you, I met a LOT of students who were only there because some high school guidance counselor or their misguided parents had pushed them to attend.

Among the commentary found at Professor Reynold's blog:

"A new study finds that students at 514 colleges and universities are more likely to default on their student loans than graduate."

"A new study from McKinsey & Company reveals that 45 percent of four-year college graduates now work jobs that don’t require college degrees.

The study also revealed that one-third of college students believe their four-year education insufficiently prepared them for lives as adults.

As the cost of a college education skyrockets the perceived value of a college education is plummeting as more and more recent graduates have a hard time finding jobs.

The Old Paradigm: After graduating from college you started a business in your parents' garage.

The New Paradigm: After graduating from college you live in your parents' garage.

If you want to see what it looks like when the government runs everything, visit an Indian Reservation.

ukdenverdan wrote:The sad part is that most of cost increase comes increases in adminstration. There are a good number of reports you can read about the increase in deans, provosts, and assistant provosts while the number of faculty have remained steady. These reports also show that these new administrative positions account for a large amount of the total increase in higher education costs.

I have not seen university budgets so I cannot confirm or refute your assertion. Informally I will say that diversity, advising, information technology, and promotion take an increasing share of budget. Bloated retirement compensation to the staff and administrators also takes a growing share. Faculty are generally on a 401K plan so the costs have been stable. Faculty salaries have also increased although not enough to explain the increase in tuition costs. CU Boulder spends $20M+ on diversity programs. CU Denver probably spends a lot also.

Universities refuse to change their business model. Bruce Benson has become a champion for the institutions, not for the students, parents, and taxpayers. He effectively argues that higher education exists primarily for the institutions, not students, parents, and taxpayers. One major tenet of the CU System is research subsidies. Although the medical campus and areas in universities (Engineering, Science, and to some extent Education) bring in large amounts of external funding (mostly federal), vast areas bring in little or no external funding (including business). Yet tuition and state dollars heavily subsidize 40% of each faculty members time for research. The research has little impact on undergraduate and professional masters level education.

There are large levels of venture capital pouring into alternatives such as Udacity and Coursera. There are also low cost initiatives. In 5 years, the higher education landscape will be radically changed.

Do not fall for this poor man argument about higher education. Vast sums have been spent in the last 10 years on new physical plant for many Colorado universities. Administrators and staff have retired with exorbitant retirement compensation. Employment has increased in many administrative and support areas. Salaries have increased in many years including the last few years. Federal aid has increased sharply. Private donations (tax subsidized) have increased sharply.

throatwarbler wrote:The reason that I would never trust my money to a quasi-public investment scheme such as this is that I can't help but envision it's investment decisions being directed in part by politically correct thinking. I don't know this, but I would not be surprised if this fund had and has a sizable renewable energy segment in it's investment portfolio, for instance. Of course, I have no actual knowledge of the fund's investment practices, but happily, I never needed to.

Your correct on your suspicion. Wherever there is a pot of public money, count on democrats to spend it or republicans to enrich themselves by stealing it.